New Covey contract could cost nearly $2 million

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Vice chancellor sees potential revenue in Corporate College.

By Cynthia M. Herrera

cherrera151@alamo.edu

The Alamo Colleges could spend $1.97 million over the next four years on “The 7 Habits of Highly Effective People” and other FranklinCovey training materials for students, employees, local corporations and residents.

The district operates a Corporate College under its economic and workforce development department, and it expects to make a profit from companies that enroll its employees for leadership development and residents who enroll in the courses.

The board of trustees unanimously approved a contract with Covey during the regular board meeting Aug. 18.

However, the contract approved by the board is still being negotiated and terms may change the projected revenue.

The four-year contract the board approved is expected to cost the district $1.97 million and provide the district with unlimited access to training materials and course offerings, including 31 FranklinCovey courses on leadership, management and success.

The district currently uses for employees “The 7 Habits of Highly Effective People,” “4 Disciplines of Execution,” “Leading at the Speed of Trust” and “Leadership: Great Leaders – Great Teams – Great Results Leading Across Generations.”

The Student Leadership Institute; EDUC 1300, Learning Frameworks; and student development courses use “The 7 Habits of Highly Effective College Students.”

Hope Galvan-McCall, director of organizational development and talent management in the human resources department, said the Alamo Colleges first started using FranklinCovey courses 12 years ago at Northwest Vista College.

Corporate College provides workforce education training sessions for employees of a corporation. Training is offered in manufacturing, health care, information technology and business leadership development.

Although the Alamo Colleges use “7 Habits,” and 4DX courses, attached to the minute order approved by the board were other courses such as “The 7 Habits of Highly Effective Families,” “The 7 Habits of Highly Effective Teens” and “The 8 Habits of a Successful Marriage.”

Diane Snyder, vice chancellor of finance and administration, said the courses attached were a product list FranklinCovey offers.

“What if we had a corporation that wanted that (course)? They said, ‘Oh, I like that one, let’s do that one,’ we can offer it. It’s all the product list,” Snyder said.

Snyder said even though the product list contains other courses not pertaining to higher education or leadership training, there is no extra cost to the contract for them and that is why many administrators at the district office favored the contract.

“We like this deal so much because it (has) the basic programs we do. We’ve already got money in the budget (for FranklinCovey). It’s within our budget,” she said. “Everything else is gravy. We can get those materials for free; we don’t have any cost to our students for it. That’s why we thought it was such a slam dunk because it was just such a great ability to not have to pass on instructional material cost to our students.”

Materials would consist of online training. Snyder said the contract would allow customization of copyrighted material.

In 2016, the district planned to pay FranklinCovey $295,500, and the cost would have risen to $492,500 in 2017, $591,000 in 2018 and $591,000 in 2019.

Because the terms are being negotiated, projected revenue from enrollment in Corporate College is expected to be $83,500 for fiscal year 2016, $103,950 in fiscal year 2017, $129,000 in 2018 and $150,000 in 2019, Federico Zaragoza, vice chancellor of economic and workforce development, said in a phone interview Sept. 4.

He projects the Alamo Colleges would enroll at least 180 employees in Corporate College in 2016, 225 in 2017 and 300 in 2018. He had no projection for 2019.

Before the terms for the contract was being negotiated, Snyder said students would have benefited from the materials, and corporations would have received a great price paying $150 instead of the market rate.

Originally, without a contract, the price for materials for 2,156 Alamo Colleges students and employees would have totaled $323,000 and another $221,445 for materials for 550 people in Corporate College for a total of $544,845.

Because the contract would have provided unlimited free materials to employees and members of the Student Leadership Institute and more than half the cost of materials for Corporate College, the fixed cost would have been $295,000 for fiscal year 2016, according to the minute order.

Market pricing for materials for FranklinCovey courses are $399 for a face-to-face course taught at Alamo Colleges, and $499 for an online course through FranklinCovey, according to the minute order.

Through the contract, materials would cost $150 per student enrolled in Corporate College, a reduction of 12 percent or $262,000 less than market pricing.

Now that terms may change, Zaragoza projects the cost could be $600 for face-to-face training for employees in corporations and the public.

The contract also allowed for an additional $50,000 per year in case the training requires a facilitator consultant; therefore, costing $345,000 for the first year, Snyder explained in a phone interview Aug. 31.

“We wanted to put a little bit as a cap at more than $50,000 in case some assistance is needed as we work with their materials to create these versions for the corporations,” she said.

The cost increases in 2017-18 because district expects more corporations will participate in Corporate College courses, Snyder said.

The minute order states the contract would provide revenue through actively marketing leadership training to corporations.

During meeting Aug. 11 of the Audit, Budget and Finance Committee, District 6 trustee Gene Sprague said the mission of the Alamo Colleges is training in education.

“If you need education, if you need your people trained, there’s only one place to go and that’s Alamo Colleges,” Sprague said. “This is definitely within our mission.”

Through the new contract, Alamo Colleges would have been able to provide training to large companies with 500 or more employees.

The previous contract with FranklinCovey limited training for 250 employees or less.

The Audit, Budget and Finance Committee on Aug. 11 discussed the FranklinCovey contract but did not have access to details.

When the time came for the committee to vote on the proposal, Chair Anna Bustamante, District 3 trustee, was upset because other trustees wanted to approve it and move on to the next item despite the lack of information about the contract.

“A minute order was just thrown at us, like here, ‘approve it because it’s good, we think it’s good,’ and the mistake was you didn’t do a presentation. You didn’t say what it was about. That’s the problem,” Bustamante said.

“It’s a great program, a great leadership building opportunity. It’s just we didn’t know anything about it,” she said.

It was not until the regular board meeting on Aug. 18 that Snyder provided a PowerPoint explaining why the contract was a cost-saving deal.

Snyder said she did not present the information at the committee meeting because pricing for the contract came late in the month and she wanted to get it on the minute order quickly before losing on an opportunity for the entire year.

Those in Corporate College and students in the leadership institute would receive certification after completing training and would appear on student transcripts.

The long-term goal is to provide 60,000 students with training in the soft skills needed to work in the corporate world, instead of only 100 students who participate in the leadership institute, Chancellor Bruce Leslie said.

“Part of this material, which they developed for us, is around the whole issue of student success at college,” Leslie said during the regular board meeting Aug. 18. “This material allows us to offer, free, to all of our students … so that we can enhance their experience.”

The contract also provided Zaragoza an opportunity to plan a pilot with the city of San Antonio to train 150 employees this fall.

However, there is a possibility the pilot could not take place if the terms change because it would only allow Alamo Colleges to train companies with 250 employees or less.

The city of San Antonio currently employees more than 500 employees Zaragoza said.

Because of the possibility of the terms changing, Snyder is expected to report back to the board of trustees to present the final negotiated contract.

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